Technological Innovation in Industry

Those most inclined to find new ways to produce goods were those who had an incentive to do so. Artisans generally did not; they preferred the traditional way of doing things. Rather innovations would come from those outside of the traditions of guilds and workshops; those influenced by Enlightenment thinking about the way knowledge could be used to create "progress;" and those with the resources (capital) available to apply new ideas to industry. In short, these would be "entrepreneurs."

One way that entrepreneurs changed production was through cottage industry, which made use of the seasonally underemployed agricultural workers who lived in "cottages" in the countryside. These workers needed to make extra money to support themselves but could not come to the cities and work in workshops. So some entrepreneurs began to bring the work to them, transporting raw materials (such as cotton or wool) to their cottages and collecting finished cloth. The entrepreneur would pay each "cottage worker" a small amount for each piece of cloth; this was known as a piece rate. By collecting many pieces of finished cloth, the entrepreneur could generate a large shipment to sell in a market in a nearby city or elsewhere in Europe or the English colonies.